Canadian group Candu Energy has signed a binding and exclusive cooperation agreement with China Nuclear Power Engineering Company (CNPEC) for the construction of CANDU Units 3 and 4 at the Cernavoda Nuclear Power Plant in Romania, according to Canada NewsWire.

This agreement follows a letter of intent signed by China General Nuclear Power Group (CGN), CNPEC's parent company, and Romanian electricity company Nuclearelectrica (SNN), in November 2013, for investments in and the development of two additional nuclear units at the Cernavoda site.

Industrial and Commercial Bank of China has agreed to make investments in Cernavoda’s 3 and 4 reactors, according to Romanian officials.

Nuclearelectrica already operates two CANDU nuclear reactors, which generate 20 percent of Romania’s electricity. The first one came into service in 1996 and the second one became operational in 2007.

Work on the Cernavoda Nuclear Power Plant started during Nicolae Ceausescu’s communist regime. Initially it was projected to have six reactors, but two of them were abandoned. Analysts are skeptical about the economic viability of building reactors 3 and 4 as Romania’s power generating facilities exceed internal demand. However, the Romanian Government has it on its strategic investments list.

In 2008, European energy companies such as Enel, RWE, Cez, GDF Suez and Iberdrola, as well as steelmaker ArcelorMittal signed an initial Nuclearelectrica in financing this investment, but one by one they all backed out from the project in recent years. The Romanian Government then started negotiations with the Chinese, who showed interest for large project in Romania, both in the energy sector but in infrastructure as well.

editor@romania-insider.com